Malko Enterprises' bonds currently sell for $1,150.They have a 6-year maturity,an annual coupon of $75,and a par value of $1,000.What is their current yield?

Question

Quizplus · Accepted Answer

The current yield is calculated as the annual coupon payment divided by the current price of the bond. Here, the annual coupon payment is $75, and the current price of the bond is $1,150. Therefore, the current yield = ($75 / $1,150) * 100% = 6.52%.

Malko Enterprises' Bonds Currently Sell for $1,150